Ryan Beals- Tax Prep Insight

Ryan Beals is a Certified Public Accountant and an Entrepreneur. He is the founder of Ryan Beals, CPA, a CPA firm specializing in tax planning services.

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Your hosts: Colton Cockerell & Trisha Stetzel
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Colton Cockerell
Trisha Stetzel

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Transcript

Colton Cockerell: 0:04

Hello and welcome to a another exciting episode of Bridge the Gap where we're balancing life through health, wealth, business and relationships. Alright, hello everyone and welcome to the show. My name is Colton Cockerell. And with me, I have Miss Trisha Stetzel, my co host Trisha good day

Trisha Stetzel: 0:26

today. until early for you, I know it's okay. You just keep eating your breakfast. It's all good. Hey guys, welcome back. As you might remember, we are talking about financial wellness this month. And so today we're going to talk about tax preparation and who better to talk about taxes than Ryan Beals? With Ryan Beals, CPA

Colton Cockerell: 0:51

Ryan Beals, CPA. Yes. And before we introduce Ryan Ryan says hello needed to hear his lovely voice. I do want to give a shout out to our sponsor today, which is Results Xtreme Business Solutions for all your business needs. All right, we think she liked it a little addition. Ryan.

Ryan Beals: 1:07

Hey, how's it going? Appreciate you having me on?

Colton Cockerell: 1:10

Oh my gosh, of course, of course. Hey, so we're gonna jump right in because we only have 16 minutes. So Ryan, I know is the month of March and tax season is like less than a month away at this point, as we're airing this podcast, and so I'm sure a lot of questions on people's mind, especially those who are putting in their last minute taxes. So let's go ahead and dive on in. Whenever you're hiring a CPA tax professional. Why why do you necessarily need that you hear everyone? Oh, TurboTax or, you know, all these other self? These other self softwares? What you know, what is the importance of working with a tax preparer or a CPA?

Ryan Beals: 1:48

You know, the biggest thing for hiring a CPA is that when you go to your DIY spaces like a TurboTax and h&r block, a lot of times it's just a service, it's a means to an end, all's it is is filing your taxes. But when you work with a tax professional like myself, we're really digging in seeing where you are helping you and be more of a strategy to help you save on taxes and less just prepare the taxes, which at this point is more of a commodity. So helping you be the most efficient you can with your taxes and helping you run your business in that way.

Colton Cockerell: 2:17

Oh, for sure. That probably was the first time he's got that question. Ready? Yes. There it is.

Trisha Stetzel: 2:24

Ready? There it is. So, Ryan, you know, small business owners, probably I'm just guessing are reluctant to work with a CPA throughout the year. And a lot of times, they're really just looking into tax season. So when is the right time to bring a CPA in and partner in your business?

Ryan Beals: 2:45

The right time is right now, even if you're listening to this six months from now, nine months from now could be August, the 26th, you're listening to this podcast, probably all freaked out. If that's the case, it's time to call your CPA, the best time to hire a CPA is throughout the year, because then is that's the best time to get the most value and to have the strategy because the best tax savings in the best tax planning is done throughout the year. And after your end, it's honestly all too late. You get to a point when you're filing your taxes, and there's only a few things you can do it that point. So the big money happens during the year.

Colton Cockerell: 3:21

So let's talk about that. I mean, that's a really good point. I think a lot of people, they start thinking about tax season either when the new year starts. So when they start getting their 1099 or W2s. So what what So to explain a little bit more, what are things that CPAs can do and tax preparers for the individual throughout the year even past the April and October deadline.

Ryan Beals: 3:42

Sure. So throughout the year, one thing that business owners don't realize they need to do, especially when they're in those beginning stages, is calculating estimated taxes. I can't tell you how many times I'll get to the end of the year and in May or in April, we're calculating their taxes and they've hit it out of the ballpark. They've had a great year, but they haven't filed they haven't paid their estimated taxes throughout the year. So they have this really big number. So it is scary. You know, it's they're not used to if they're coming from a W2 they they're used to withholdings, that's one thing we help with. So that's a piece and then also the strategy doing having advice on how to run your business to be more efficient, tax wise, is done throughout the years. Well, especially when you get to your end when you're talking about do I do I buy this or not having those conversations is really important as well. So that's something that happens beyond the typical policies.

Colton Cockerell: 4:37

So, you're telling me that you're not retroactive, you're telling me you're actually trying to be proactive.

Ryan Beals: 4:42

Proactive is the best way save tax on that retroactive. You know, it's I mean, there are some things you can do but like said the big money happens throughout the year being proactive is going to be the best strategy to actually save on taxes and get the most out of it.

Colton Cockerell: 4:56

Good word

Trisha Stetzel: 4:57

I said. So, Ryan, what are you Some of the most common mistakes you see from small business owners.

Ryan Beals: 5:04

So I gotta say, the biggest mistakes that I see is probably just not understanding that they need to file this may taxes throughout the year. It could be I mean, if you really hit the park, it's not uncommon for them to owe a really big number and it to be five plus digits in taxes because they didn't understand and you do that. One of the thing, and, you know, mistakes happen between just not knowing that they can take these expenses, or putting the TurboTax and TurboTax doing its magic throughout the same, you know, behind the scenes, and then giving them a form that they think is right, but may not be, but they just not understanding that it might be so not putting in information from their forms correctly, putting stuff in twice, not being able, not knowing what expenses they can take throughout the year. And so those would be the biggest things, not maybe, I don't want to say not being aggressive enough. But a lot of business owners just don't realize that there's some expenses like home office and milage that they can take that they they're leaving on the table a lot of times.

Colton Cockerell: 6:11

And so and with that mean, isn't there a penalty to at the end of the year if you do not withhold, you know, the right amount of taxes every quarter.

Ryan Beals: 6:18

There is there is underpayment, penalties, especially if you owe more tax than you did in the previous year, and you didn't withhold enough, it could be a big one, and then not filing as well. And the longer that you go without paying there's there's interest accruing behind the scenes as well.

Colton Cockerell: 6:35

Oh, goodness. All right. So then with that, you know, for someone who let's say they are just paying a lump sum, I didn't withhold anything this year 1099, or even w2 w2 also is that also affected by w2 employees.

Ryan Beals: 6:50

So if you're you could have some withholding if you also are working a side job, and withholding on the side with another business. But one strategy, you can have to make sure that if you're listening to this, and you're like, Oh man, I haven't withheld anything. One strategy you can take just to see how it goes in these first couple months is, as you're bringing in money, 15% of revenue, take that to the side and pay that the the IRS every quarter. And that can be a good point to start, and then adjust that as you go gets a little too much, you can withhold a little bit less. And then when once you hire a CPA, you can have a little bit more precise number and the end goal, the chef's kiss, if you will get that number to where it's within a couple $100. Hopefully, it's overpaid. And you're good to go in taxes on a on a problem. It's just a matter of filing.

Colton Cockerell: 7:39

You got those people though, who are like, You know what, I love a refund, I want to make sure that I get money back and get the people like I've given the IRS dime more than they need. I don't want them using my money for interest. You know, they just

Ryan Beals: 7:51

yeah, see the one of the other? You know, yes, I see that a lot too. And, you know, having that conversation with them, it's like, just because you had a refund doesn't mean that you paid less or more taxes. It just means you gave the IRS a bigger loan this year. A lot of

Trisha Stetzel: 8:07

So, Ryan, I think in this small business space, one of the things that I hear a lot is holy cow, it cost me 1000s of dollars to get my taxes done every year. Is there is there a different ideal out there? I know you and I have talked about you know, maybe this subscription ideal of letting people pay a smaller amount or letting the small business owners pay a smaller amount over the year versus just tossing out two or $3,000 to get their taxes filed. Can we talk a little bit about that?

Ryan Beals: 8:38

Yeah, absolutely. And this is something that I've thought a lot about. And I understand that point of having to spend a large lump sum to file your taxes in April might not be the best strategy. And it can be really hard for that point. So so really figure out a way to stretch out the cost throughout the year and provide more value than you might get. So one thing that I do is I have a subscription model, and that is the tax preparation that planning questions throughout the year. I don't charge any more for that if you get letters from the IRS taking care of that quarterly estimated payments for calculating down the side. So really trying to find a holistic approach to to provide as much value as possible to the small business owners because we're being squeezed in ways they don't understand.

Trisha Stetzel: 9:26

I really like that Ryan is it seems more like a personal service, right? Instead of me bringing you a shoe box or receipts and saying hey, can you figure this out, and I'll drop you a few $1,000 Right. So it's more personalized,

Ryan Beals: 9:38

trying to figure out a way to take as much off the business owners plate as they can to make it as easy as possible for them. If I can get to the point to where they just hand in the documents and even better to where they just say hey, taxes done. Here's a you know, trying to really try to take as much off their plate as possible and thinking about ways to take that to the next level. Every point.

Colton Cockerell: 10:02

Yeah, that's really interesting. And I feel like that's a, that's a model that we're probably gonna be getting into, you know, years from now is the subscription styling people prefer to just pay a flat fee every month versus, you know, a large sum at, you know, one period of time. So that's actually a very interesting way to look at it. What about this? And that's, and we, we have to probably have you back just to speak solely on that type of model. But I'm curious because we do have listeners too. Again, they haven't filed their taxes. What do you have any tips for anyone? If they are filing right now? Maybe they're not using a CPA? What are some little things that nuggets that they probably don't know, because they're not working with CPA and hopefully those nuggets will make them realize, hey, I need to work with a CPA. Do you have any golden nuggets?

Ryan Beals: 10:43

Yes, absolutely. So one of the first things, if you aren't already, you should really consider hiring a bookkeeper. That is one of the you know, you hear the thing, the bill saying garbage in garbage out, having a bookkeeper could be one of the easiest, or one of the biggest returns on value, is having those numbers this side can help you if you already had the financials, it should be able to plug in the return, especially if you're in those first couple years. Having those financials is will make filing the return easier. And when you're talking to your CPA having those numbers and they clean numbers in something that's easy to look at. And comparable. It's I can take those numbers and run with it and help you to vote in the best way possible, instead of trying to figure out based on you know, just talking to you what you got going on having those numbers. That's That's my language. So having the Rosetta Stone, if you will, the financials is probably the best step.

Trisha Stetzel: 11:39

So Ryan, oh, we do have some startups or people who are, you know, leaving corporate jobs that are opening businesses to some startups out there listening to the show? Can you give us a once over the difference between a bookkeeper and a CPA?

Ryan Beals: 11:56

Absolutely. So a bookkeeper is going to be more in your day to day tracking your expenses on a like said everyday kind of level, as you spend, you go to Starbucks, you buy equipment, you'd have all the revenue that's coming in there, categorizing it into the correct place, and putting it into a format that's actually usable to where people like the business owner can have something comparable as either to month to month. That is what a bookkeeper does, that's their job is really the organizer in the CPA is more of a strategist taking that information and running with it. So you're doing this, we really need to do this instead, let's let's organize the business this way. If we did it this way, as opposed to that way you can save X amount on taxes. So taking that information and applying it strategically.

Colton Cockerell: 12:45

And so and that is interesting, because I think even with you know, speaking with her the CFO a few weeks ago, Trisha, you know, she also was very focused on the accounting, the CPA, the bookkeeper, the CFO. That's very interesting given there, I like that they all kind of work together, they all are kind of over they entwined. Let me ask you this, what is it like? And I've actually never asked any CPA to surprisingly, but what is it like to work with such a dysfunctional organization like the IRS?

Ryan Beals: 13:13

You know, it's one of those things where the IRS gives laws. And it's, a lot of times it's up for interpretation, because their interpretation is so loose, and they the IRS is stuck between a rock and a hard place between being accessible and being precise. And I could imagine that if you're a lawyer, you're thought of precise and accessibility is different from the average person. But on top of that, the IRS, they, they're dealing with the same problems. We are there working from home, they're trying to figure out this paper thing. And there's stories of papers being stored in the parking lot of storage containers and trying to get to all this information. And there they have a very large backlog and it's hard to get ahold of them sometimes. So the I saw a recent recent survey that only 20% of the calls the IRS, we're actually being answered by a person. And that was the last couple months. So it if your tax preparer is trying to get ahold of the IRS just know they're trying, but it's hard sometimes with what we're given.

Trisha Stetzel: 14:24

I read an article called I was sharing this with Ryan a little bit earlier before the show, I read an article that the IRS is being audited

Colton Cockerell: 14:32

than they should be no i I've done this a few times with clients. Just kind of like as an added service. I helped them you know, get an EIN number from from IRS. Usually a pretty quick process, but there are times on processing EINs now where depending on you know how long ago you're trying to get number. It is Unbeliev like It's like months, like two months before you get it. I mean Depending again, if you go online versus doing a paper depending on the circumstance, but it is insane. And yes, you're on hold for over an hour just to get a hold some It's so frustrating. I'm sorry. We want to keep talking about the IRS. And that's what people don't talk about. But, man, Ryan, that that was good information. Again, we, we talked about the financial wellness three times out of the year, three months out of the year. So we definitely want to have you back. So I kind of want to focus solely on the idea of a subscription model, because I think that's fascinating. I think our listeners will be more intrigued to hear what that's about. Trisha, you want to wrap us up?

Trisha Stetzel: 15:32

Yeah, absolutely. I would love to do that. And by the way, we need to talk about the next time Ryan comes back about cryptocurrency and taxes too, because I know that's your favorite topic.

Colton Cockerell: 15:41

I was trying to leave, trying to leave it alone to take leave it alone

Trisha Stetzel: 15:45

today.

Ryan Beals: 15:48

Anything. Yeah. Ryan, thank

Trisha Stetzel: 15:51

you so much for being on the show today. We really enjoyed chatting with you. And for our listeners Tune in next week for another exciting episode of Bridge the Gap will be focused on financial independence, right, because we've got five shows in March,

Colton Cockerell: 16:06

who's our guests next week.

Trisha Stetzel: 16:07

Oh, gosh. I think it just might be Colton Cockerell. I know. Could you guys imagine? Alright, thanks again guys, and we'll see you next week.

Colton Cockerell: 16:19

Thanks again for tuning into this week's podcast. Don't forget to subscribe and share this podcast with the most important people in your life. Colton Cockerell with Sharer McKinley Group, LLC is located at 820 South Friendswood Drive Suite 207 Friendswood, Texas 77546 phone number to 281-992-5698. Securities and investment advisory services offered through NEXT Financial Group, Inc. member FINRA/SIPC Sharer McKinley Group is not an affiliate of NEXT Financial Group, Inc.